Meet wrapped bitcoin, a crypto startup, that aims to create a bitcoin-backed ethereum token.
BitGo, in collaboration with numerous other crypto companies, is working on this endeavor. The concept and the technical side of the project don’t seem to be very intuitive, and that’s because they aren’t. However, the principle idea is quite straightforward: create an ERС20 token that will be based on bitcoin at a 1:1 ratio.
If successful this startup will permit users to use bitcoin in the ethereum blockchain through a special system as well as withdraw bitcoin through it, which will result in the equivalent amount of the ERC20 token being burned.
WHY IS IT IMPORTANT?
- This project will supposedly allow an easier exchange between the two dominant, but rather alienated cryptos
- The project is somewhat questionable, as the very idea behind it, putting a blockchain over another blockchain, is, to say the least, puzzling.
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